Pv industry status report 2009

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PV Status Report 2009

Research, Solar Cell Production and
Market Implementation of Photovoltaics

August 2009

Arnulf Jäger-Waldau
European Commission, DG Joint Research Centre,
Institute for Energy, Renewable Energy Unit
Via Enrico Fermi; TP 450 I – 21027 Ispra (VA), Italia

EUR 24027 EN

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European Commission, nor do its contents prejudge any future
Commission proposals in any areas of Community policy.

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JRC 53664

EUR 24027 EN
ISBN 978-92-79-12800-4
ISSN 1831-4155
DOI 10.2788/22576

The report is online available at:
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© European Union, 2009
Reproduction is authorised provided the source is acknowledged

Front cover: Artwork by Jennifer Rundle
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Printed in Belgium

PV Status Report 2009 | 5

Preface
Spiking oil prices at $ 147.27 per barrel in July 2008 and Photovoltaics is a key technology option to realise the shift
speculations when the oil price will exceed $ 200 per barrel to a decarbonised energy supply. The solar resources in
have already become a reality. The enormous price fluctua- Europe and world wide are abundant and cannot be mono-
tions of oil prices during the last 12 months due to the polised by one country. Regardless for what reasons and
volatility of the financial markets and economic turmoil, have how fast the oil price and energy prices increase in the
highlighted our strong dependence on oil and have added an future, Photovoltaics and other renewable energies are
additional argument for the introduction of renewable ener- the only ones to offer a reduction of prices rather than an
gies: minimisation of price volatility risks. increase in the future.

The Gas Crisis at the beginning of 2006, the interruptions of As a response to the economic crisis, most of the G20
the gas supply in the summer of 2008 and early 2009 have countries have designed economic recovery packages which
demonstrated that Europe is highly vulnerable with respect to include “green stimulus” measures. However, compared to
its total energy supply. A possible solution is the diversifica- the new Chinese Energy Revitalisation Plan under discussion,
tion of supply countries, as well as the diversification of energy the pledged investments in green energy are marginal. If no
sources including renewable energies and Photovoltaics. changes are made, China which now strongly supports its
renewable energy industry, will emerge even stronger after
In June 2009, the new European Directive on the “Promo- the current financial crisis.
tion of the Use of Energy from Renewable Sources” went
into force and does not only set mandatory targets for the In 2008, the Photovoltaic industry production almost
Member States in 2020, but also gives a trajectory how to doubled and reached a world-wide production volume of
reach it. The aim of the Directive is to provide the necessary 7.3 GWp of Photovoltaic modules. Yearly growth rates over
measures for Europe to reduce its green-house gas emis- the last decade were in average more than 40%, which
sions by 20% in 2020 in order to support the world-wide makes Photovoltaics one of the fastest growing industries
stabilisation of the atmospheric greenhouse gases in the at present. Business analysts predict the market volume
450 to 550 ppm range. to increase to € 40 billion in 2010 and expect lower prices
for consumers. The trend that thin-film Photovoltaics grew
faster than the overall PV market continued in 2008.

The Eighth Edition of the “PV Status Report” tries to give
an overview about the current activities regarding Research,
Manufacturing and Market Implementation. I am aware that
not every country and development is treated with the same
attention, but this would go beyond the scope of this report.
Nevertheless, I hope that this report will provide a useful
overview about the situation world-wide. Any additional infor-
mation is highly welcome and will be used for the update of
the report.

The opinion given in this report is based on the current
information available to the author, and does not reflect the
opinion of the European Commission.

Ispra, August 2009

Arnulf Jäger-Waldau
European Commission
Joint Research Centre; Renewable Energy Unit


0. Table of Content Preface 5

1. Introduction 9

2. The World Market 13

3. Japan 21

3.1 Policies to Introduce New Energies in Japan 21

3.2 Implementation of Photovoltaics 22

3.3 NEDO PV Programme 25

3.4 Japanese Market Situation 29

3.5 Solar Companies 30

4. People’s Republic of China 37

4.1 PV Resources and Utilisation 38


4.3 Polysilicon, Ingot and Wafer Manufacturers 43

5. Taiwan 47


6. The United States 51

6.1 Incentives supporting PV 55

6.2 Solar Energy Technologies Programme 61

6.3 Very High Efficiency Solar Cell Programme 64

6.4 The US PV-Industry Roadmap 65


7. The European Union 71

7.1 Market and Implementation in the European Union 74

7.2 PV Research in Europe 89


8. Outlook 101

9. Acknowledgements 105

10. References 107


1. Introduction Production data for the global cell production1 in 2008 vary
between 6.9 GW and 8 GW. The significant uncertainty in the
data for 2008 is due to an overheated market, as well as the
fact that some companies report shipment figures, whereas
others report production figures. In addition, the difficult
economic conditions led to a decreased willingness to report
confidential company data. Nevertheless, the figures show
a significant growth of the production and an easing of the
tight silicon supply situation. However, the delay of a number
of silicon expansion projects might lead to a tight supply
situation again, if markets recover faster than the silicon
expansion takes place. Our own data, collected from various
companies and colleagues was then compared to various
data sources thus led to an estimate of 7.35 GW (Fig. 1),
representing a production growth of about 80% compared
to 2007.

Again, both Chinese and Taiwanese production increased
over-proportionally, keeping the PRC in the top rank with
about 2.4 GW followed by Europe with 1.9 GW, Japan with
1.2 GW and Taiwan with 0.8 GW. In terms of production,
Q-cells (DE) was N° 1 (570 MW), followed by Suntech (PRC)
with 550 MW, First Solar (US/DE/Malaysia) 503 MW and
Sharp (JP) 470 MW. However, in terms of shipments, the or-
der was slightly revised, N° 1 Q-cells (DE) 570 MW, followed
by Suntech (PRC) with 497 MW, Sharp (JP) 458 MW and First
Solar (US/DE/Malaysia) with 435 MW [Min 2009].

1
Solar cell production capacities mean:
- In the case of wafer silicon based solar cells only the cells
- In the case of thin films, the complete integrated module
- Only those companies which actually produce the active circuit (solar cell) are counted
- Companies which purchase these circuits and make cells are not counted.

Fig. 1: World PV Cell/Module Production 8000
from 1990 to 2008
(data source: Navigant [Min 2009], Rest of World
7000
PV News [Pvn 2009] and own analysis) United States
Taiwan
6000
PR China
PV Production [MW]

Europe
5000
Japan

4000

3000

2000

1000

0
1990 1995 2000 2001 2002 2003 2004 2005 2006 2007 2008

10 | PV Status Report 2009

This rapid increase of the production also led to a massive The number of consulting companies and financial institu-
increase of inventory stocks. This can be observed if one tions offering market studies and investment opportunities
looks at the development of the figures reported for ship- has considerably increased in the last few years and busi-
ments to first point of sale (5.5 GW) [Min 2009] and the ness analysts are very confident that despite raising interest
global PV Market estimates which range between 5.5 GW rates, the Photovoltaics sector is in a healthy long term
and 6 GW [Epi 2009, Fra 2009]. condition. Following the stock market decline, as a result of
the financial turmoil, the PPVX3 (Photon Pholtovoltaic stock
Since 2003, total PV production increased almost 10 fold index) declined to 2,095 points at the end of 2008. Between
with annual growth rates between 40% and 80%, whereas January and 7 August 2009 the index has increased by
the thin film segment – starting from a very low level – grew 12.9% to 2,552 points and the market capitalisation of
in average by over 90%. In 2008 shipments to point of first the 30-PPVX companies4 was € 32.6 billion. It is expected
sale increased to 750 MW or 14%. The high growth rate of that the arrival of the “green stimulus” money from govern-
thin film production and the increase of the total production ments aimed to help relieve the effect of the recession will
share indicate that the thin film technology is gaining more further stimulate the PV markets. Since September 2008,
and more acceptance in the markets. Equally competitive the major economies have announced about US $ 185 billion
technologies are amorphous/micromorph Silicon, CdTe and (€ 132 billion) of recovery funds aimed at renewable energies
Cu(In,Ga)(S,Se)2 thin films. In addition, more and more PV or energy efficiency measures. However, analysts predict that
manufacturers are diversifying their production portfolio and only about 15% or less will be spent in 2009, whereas two
add thin film production to the wafer based one. It should be thirds of these funds will be spent in 2010 and 2011.
noted that the current thin film market leader First Solar will
reach an annual production capacity of more than 1 GW by 3
The PPVX is a non commercial financial index published by the solar magazine
the end of 2009. Sharp (Japan), Showa Shell Sekiyu (Japan) „Photon“ and „Öko-Invest“. The index started on 1 August 2001 with 1000 points and 11
companies and is calculated weekly using the Euro as reference currency. Only companies
and Best Solar (PRC) had announced they would increase
which made more than 50% of their sales in the previous year with PV products or services
their thin film production to at least 1 GW capacity to be
are included [Pho 2007].
operational in 2010 [Bes 2008, Sha 2007] and 2011 [Sho
2008] respectively, but in the meantime their expansion 4
Please note that the composition of the index changes as new companies are added
speed has slowed down. Despite this development, a thin and others have to leave the index.
film market share of 20 to 25% in 2010 seems not to be
unrealistic as a number of other thin film manufacturers are Market predictions for the 2010 PV market vary between
aiming at 500 MW production capacities in that time frame. 6.8 GW (Navigant conservative scenario), 7 to 10 GW (EPIA
policy driven scenario, EuPD, Bank Sarasin, LBBW) and
Public traded companies manufacturing solar products, 17 GW (Photon Consulting). Massive capacity increases are
or offering related services, have attracted a growing number underway or announced and if all of them are realised, the
of private and institutional investors. In 2008 worldwide worldwide production capacity for solar cells would exceed
new investments into the renewable energy and energy 38 GW at the end of in 2010. This indicates that even with
efficiency sectors increased to a record US $ 155 billion the most optimistic market growth expectations, the planned
(€2 110 billion), up 5% from 2007, but the second half of capacity increases are way above the market growth. The
the year saw a significant slowdown due to the unfolding of consequence would be a quite low utilisation rate and
the financial crisis (Quarter to quarter difference: -10% Q3, consequently an accelerated shift from the demand-driven
-23% Q4) [New 2009]. This trend continued in the first markets of the last years to an oversupplied market which
quarter of 2009 (-47% compared to Q4 2008), but then will increase the pressure on the margins. Such a develop-
started to reverse in the 2nd quarter (+83% compared to ment will accelerate the consolidation of the Photovoltaics
Q1 2009) [New 2009a]. industry and spur more mergers and acquisitions.

New investments in solar power grew again surpassing The current solar cell technologies are well established
bioenergy and second only to wind with US $ 33.5 billion and provide a reliable product, with sufficient efficiency and
(€ 23.9 billion) or 21.6% of new capital in 2008 [UNEP 2009]. energy output for at least 25 years of lifetime. This reliabil-
Solar power continued to be the fastest growing sector for ity, the increasing potential of electricity interruption from
new investments: acquisition transactions US $ 11 billion grid overloads, as well as the rise of electricity prices from
(€ 7.86 billion), venture capital (VC) and private equity (PE) conventional energy sources, add to the attractiveness of
US $ 5.5 billion (€ 3.93 billion), public market investments Photovoltaic systems.
US $ 6.4 billion (€ 4.57 billion).
2
Exchange rate: 1 € = 1.40 US$


About 85% of the current production uses wafer-based Projected silicon production capacities available for solar
crystalline silicon technology. Up to now the main advantage in 2010 vary between 99,500 metric tons [Pvn 2008] and
of this technology was that complete production lines could 245,000 metric tons [EuP 2008]. The possible solar cell
be bought, installed and be up and producing within a rela- production will in addition depend on the material use per
tively short time-frame. This predictable production start-up Wp. Material consumption could decrease from the current
scenario constitutes a low-risk placement with calculable 10 g/Wp down to 8 g/Wp, but this might not be achieved
return on investments. However, the last shortage in silicon by all manufacturers.
feedstock and the market entry of companies offering turn-
key production lines for thin film solar cells led to a massive Similar to other technology areas, new products will enter
expansion of investments into thin film capacities. More the market, enabling further cost reduction. Concentrating
than 150 companies are involved in the thin film solar cell Photovoltaics (CPV) is an emerging market with approximately
production process ranging from R&D activities to major 17 MW cumulative installed capacity at the end of 2008.
manufacturing plants. In addition, Dye-cells are getting ready to enter the market
as well. The growth of these technologies is accelerated
The past shortage in silicon feedstock, the relative slow by the positive development of the PV market as a whole.
response of the established silicon producers and the accel- It is interesting to note that not only new players are entering
erated expansion of production capacities led to the market into thin film production, but also established silicon-based
entry of new potential silicon producers. PV cell manufacturers diversify into thin film PV.
The following developments can be observed at the moment:
It can be concluded that in order to maintain the extremely
■ Silicon producers are in the process of increasing their high growth rate of the Photovoltaic industry, different path-
production capacities, which will ease the pressure ways have to be pursued at the same time:
on the supply side within the next years. However, a
number of expansion projects have been delayed due to ■ Drastic increase of solar grade silicon production
the financial constraints and current market situation. capacities;

■ New silicon producers are entering the market, and in ■ Accelerated reduction of material consumption per
the process of finalising their business plans or are silicon solar cell and Wp, e.g. higher efficiencies,
already constructing new production facilities. However, thinner wafers, less wafering losses, etc.;
due to the current restricted financial opportunities
a number of projects are on hold or cancelled. ■ Accelerated introduction of thin film solar cell techno-
logies and CPV into the market as well as capacity
■ PV companies accelerate the move to thinner silicon growth rates above the normal trend.
wafers and higher efficient solar cells in order to save
on the silicon demand per Wp. Further cost reduction will depend not only on the scale-up
benefits, but also on the cost of the encapsulation system,
■ Significant expansions of thin film production capacities if module efficiency remains limited to below 15%, stimulating
of existing manufacturers are under way and a large strong demand for very low area-proportional costs.
number of new manufacturers try to enter the market
to supply the growing demand for PV modules. Despite
the scale back of expansion plans by some companies,
the number of new entrants and their planned capaci-
ties are still increasing the overall announced capacity.
If all announced thin film production capacities are
realised, more than 11 GW production capacities could
be reached by 2010. This is an increase of about 10%
compared to the announcements made in the autumn
of last year.


2. The World Market

The Photovoltaic world market grew in terms of production
by more than 80% in 2008 to approximately 7.35 GW. The
market for installed systems about doubled and the current
estimates are between 5.6 and 6 GW, as reported by various
consultancies (Fig.2). One could guess that this represents
mostly the grid connected Photovoltaic market. To what ex-
tent the off-grid and consumer product markets are included
is unclear. The difference of roughly 1.3 to 1.75 GW could
therefore be explained as a combination of unaccounted
off-grid installations (approx. 100 MW off-grid rural, approx.
100 MW communication/signals, approx. 80 MW off-grid
commercial), consumer products (ca. 100 MW) and cells/
modules in stock.

The impressive growth in 2008 is mainly due to the excep-
tional development in the Spanish market, which almost
increased five-fold from 560 MW in 2007 to 2.5 – 2.7 GW in

Fig. 2: Annual Photovoltaic Installations from 6000
2000 to 2008
(data source: EPIA [Epi 2009], Eurobserver Spain
Annual Photovoltaic Installations [MW]

[Sys 2009] and own analysis) 5000 Rest of Europe
United States
Rest of World
Germany
4000
Japan

3000

2000

1000

0
2000 2001 2002 2003 2004 2005 2006 2007 2008


2008 [Epi 2009, Sys 2009]. The second largest and most voltaic Technology Development and $ 40.5 million will be
stable market was Germany with 1.5 GW followed by the US spent on Solar Energy Deployment, where projects will focus
(342 MW), South Korea (282 MW), Italy (258 MW) and Japan on non-technical barriers to solar energy deployment.
(230 MW). The Photovoltaic Energy Barometer reported that
Europe had a cumulative installed PV system capacity of There is no single market for PV in the United States, but a
9.5 GW in 2008. conglomeration of regional markets and special applications for
which PV offers the most cost-effective solution. In 2005 the
Despite the fact that the European PV production grew again cumulative installed capacity of grid-connected PV systems
by over 80% and reached 1.9 GW, the exceptional market surpassed that of off-grid systems. Since 2002 the grid-
situation in Spain, the size of the German and the rapidly connected market has been growing much faster, thanks to
developing Italian market, the promising developments in a wide range of “buy-down” programmes, sponsored either
Belgium, the Czech Republic (51 MW), France (46 MW) and by States or utilities.

Table 1: Korean Feed-in Tarifs [Kim 2009]
Fixed Price in Korean Won/kWh (¤5/kWh)

Until Period <30kW >30 kW
30 Sept. 2008 15 years 711.25 677.38
(€ 0,44) (€ 0,42)

Until Period <30kW 30 – 200 kW 200 kW – 1 MW 1 MW – 3 MW >3 MW
1. Oct. 2008 – 2009 15 years 646.96 620.41 590.87 561.33 472.7
(0,40) (0,39) (0,37) (0,35) (0,30)
20 years 589.64 562.84 536.04 509.24 428.83
(0,37) (0,35) (0,34) (0,32) (0,27)

Portugal (50 MW) did not change the role of Europe as a net South Korea became the fourth largest PV market in 2008.
importer of solar cells and/or modules. The ongoing capacity At the end of 2006 the cumulative installed capacity of
expansions and the cap in the Spanish market might change Photovoltaic electricity systems was only in the range of
this in the future. 25 MW. In 2007 about 45 MW were installed and in 2008
the market surpassed the estimated 75 to 80 MW by far,
The third largest market was the USA with 342 MW of PV with 282 MW of new installations [Kim 2009]. The driver
installations, 292 MW grid-connected [Sei 2009]. California, for this development is the Government's goal to increase
New Jersey and Colorado account for more than 75% of the the share of New and Renewable Energy Sources (NRES) to
US grid-connected PV market. After more than a year of politi- 5% by 2011. For Photovoltaics, a goal of 1.3 GW cumulative
cal debate the US Senate finally voted to extend the tax cred- installed Photovoltaic electricity generation capacity by 2012
its for solar and other renewable energies on 23 September and 4 GW by 2020 was set.
2008. On 3 October 2008, following weeks of contentious
negotiations between the House and Senate, Congress In January 2009, the Korean Government has announced
approved and the President signed into law the “Energy the third National Renewable Energy Plan, under which
Improvement and Extension Act of 2008” as part of H.R. renewable energy sources will steadily increase their share
1424, the “Emergency Economic Stabilization Act of 2008”. of the energy mix between now and 2030. The plan covers
such areas as investment, infrastructure, technology develop-
On 27 May 2009, President Obama announced to spend ment and programmes to promote renewable energy.
over $ 467 million from the American Reinvestment and The new plan calls for a Renewable Energies share of 4.3%
Recovery Act to expand and accelerate the development, in 2015, 6.1% in 2020 and 11% in 2030.
deployment, and use of geothermal and solar energy through-
out the United States. The Department of Energy (DOE) will To reach this target, South Korea had introduced an attrac-
provide $ 117.6 million in Recovery Act funding to accelerate tive feed-in tariff for 15 years along with investment grants
the widespread commercialisation of solar energy technolo- up to 60%. From October 2008 to 2011 the following feed-in
gies across America. $ 51.5 million will go directly for Photo- tariffs are valid (Table 1).
5
Exchange rate: 1 € = 1600 KRW


From 2012 on it is planned to substitute the tariffs by a chase of “excess” electricity from PV systems at a higher
Renewable Portfolio Standard. In the new tariff scheme it rate and it is planned to introduce this measure for FY2010.
is possible to choose between 15 years guarantee and a The “Japanese Recovery Plan” with its three pillars 1) Low-
higher kWh price and a 20 years guarantee and a somewhat carbon revolution, 2) Healthy long life and 3) Exert Attractive-
lower kWh price. The previous 100 MW cap was increased ness includes the specific project “Plan to become the
to 500 MW and if it is not reached in 2009 the fixed prices world's leading PV & energy-saving nation” and calls for a
applicable for new systems in 2010 will be announced drastic acceleration of the introduction of PV power genera-
later. However, the cumulative installed capacity at the end tion. The goal is an approximately twenty-fold increase of
of 2007 was 78 MW. In January 2008, 46 MW of installed the cumulative installed PV capacity by 2020.
capacity was under the cap scheme and more than 560 MW
were already under planning or construction. The Korean In addition to the National Government, Local Government
Government aims to equip 100,000 houses and 70,000 and Utilities have announced plans as well. The Tokyo Metro-
public/commercial buildings with PV systems by 2012. An politan Government implemented a plan to install 1 GW
interesting aspect is that some of the larger projects will within the next 10 years and gives an investment support for
qualify for Clean Development Mechanism (CDM) credits, the installation of residential PV systems in FY 2009
allowing for trading of Certified Emission Reductions (CER) and FY2010. Other prefectures and cities have also announ-
under the Kyoto Protocol. ced implementation plans and are offering additional invest-
ment incentives as well.
After two years of decline, the Japanese market rebounded
slightly and reached 230 MW of new installations, 9% higher At the end of 2008, total cumulative installed capacity in
than in 2007, but still 21% lower than in 2006 and 2007. 2008 stands at 2.15 GW, less than half of the original
To change this situation, the Japanese Ministry for Economy, 4.8 GW goal for 2010 [Ohi 2009, Epi 2009]. Despite a
Trade and Industry (METI) proposed a new investment incen- production increase of 31% in 2008 compared to 2007,
tive scheme which was introduced by the Japanese Govern- the world market share of Photovoltaic devices manufac-
ment, starting in January 2009. The allocated budget for the tured in Japan further decreased from 23% to 17%.
last months of FY2008 (January – March 2009) and FY2009 The number of Japanese companies amongst the Top Ten
would allow the installation of more than 100,000 systems was three, equal to those from PR China (Fig. 3).
or 400 MW.
The rapid expansion of solar cell manufacturing capacities
METI started to review the Renewable Portfolio Standard and production volume in the People's Republic of China and
(RPS) Law in order to prepare the introduction of a new PV Taiwan is not yet reflected in a significant size of the respec-
power purchase programme, which should allow the pur- tive home markets.

Fig. 3: Top 10 Photovoltaic companies 2008 700
941
2004 3,430
600
2006
2008
Annual Production [MW}

500

400

300

200

100

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Exchange rate: 1 € = 9.5 RMB


Despite the fact that the Chinese PV market more than 100 GW by 2030 and 200 GW by 2050.
doubled in 2008 to 45 MW, the home market is still less
then 2% of total Photovoltaic production. This situation might In April 2009, SEMI's PV group published a White Paper
change because China’s RMB 4 trillion stimulus package, where they identified the need for focused, collaborative and
which was announced in early March 2009, includes RMB goal-driven R&D for Photovoltaics in India as one of the key
210 billion (€ 22 billion6) for green energy programmes. challenges for the growth and development of PV in industry
On 23 March 2009 the Chinese Ministry of Finance and [Sem 2009]. This is a clear signal that the current support
Ministry of Housing and Urban-Rural Development [Mof 2009] activities for the increase of production capacities and de-
announced a solar subsidy programme which immediately ployment are seen as insufficient to utilise the solar potential
went into effect. For 2009 the subsidy will be 20 RMB/Wp of the country. The materials and semiconductor research
(2.10 €/Wp) installed. The document neither mentions a base in India is excellent and with proper public and private
cap on individual installations nor a cap for the total market. funded R&D Programmes in place, India's academia and
It was suggested that 70% of the incentives budget would be industry could accelerate the development and growth of
transferred to the Provincial Finance Ministries. the industry substantially.

Analysts believe that these measures will accelerate the At the end of 2008, most of Photovoltaic applications in
Chinese domestic market. For 2009 a doubling, or even India were off-grid, mainly solar lanterns, solar home sys-
tripling of the market seems possible as a starting point for tems, solar street lights and water pumping systems. Grid-
the development of a GW size market from 2012 on. China connected were 33 solar Photovoltaic systems with a total
is now aiming for 2 GW solar capacity in 2011 and in July capacity of approximately 2 MWp. For its eleventh Five Year
2009 under the new energy stimulus plan China revised its Plan (2008 – 2012) India has set a target to install 50 MW
2020 targets for installed solar capacity to 20 GW. In addi- grid-connected Photovoltaic systems supported by the
tion, the National Energy Administration (NEA) has set a subsi- Ministry of New and Renewable Energy with an investment
dised price for solar power at 1.09 RMB/kWh (0.115 €/kWh). subsidy and power purchase programme. Contrary to these
moderate installation plans, Indian PV companies expect the
To promote the solar energy industry the Taiwanese Govern- PV market in India to grow to 1 – 2 GW by 2010.
ment decided to subsidise manufacturers engaging in R&D
and will offer incentives to consumers that use solar energy. Another noteworthy development is the fact that the market
About a dozen manufacturers expressed the intention to in- share of the ten largest PV manufacturers together further
vest in fabricating thin films for solar cells and eight of them decreased from 80% in 2004 to 50% in 2008. This develop-
will set up their own plants to process the products. More- ment is explained by the fact that an increasing number of
over, the Industrial Technology Research Institute (ITRI), solar cell manufacturers are entering the market. The most
a Government-backed research organisation, is going to rapid expansion of production capacities can be observed
import advanced foreign technology for local manufacturers. at the moment in China and Taiwan, but other countries like
India, Malaysia and South Korea are following the example
On 12 June 2009, the Legislative Yuan passed the “Renew- to attract investment in the solar sector.
able Energy Development Statute”, which aims to increase
the total renewable electricity capacity by 6.5 GW over the The announced increases of production capacities – based
next 20 years. It is expected that 1.2 GW of these new on a survey of more than 200 companies worldwide – again
renewable capacities would come from PV. accelerated in 2008 and the first half of 2009 (Fig. 4). Only
published announcements of the respective companies and
On 1 July 2008, Prime Minister Manmohan Singh unveiled no third source info were used. The cut-off date of the info
India’s first National Action Plan on Climate Change. To cope used was July 2009.
with the challenges of Climate Change India identified eight This method has of course the setback that
National Missions aimed to develop and use new technolo-
gies. The use of solar energy with Photovoltaics and Concen- a) not all companies announce their capacity increases in
trating Solar Power (CSP) is described in the National Solar advance, and
Mission (NSM). The actions for Photovoltaics in the National
Solar Mission call for R&D collaboration, technology transfer b) that in times of financial tightening, the announcements
and capacity building. In April 2009, the Union Government of expansion plan scale-back are often delayed in order not
finalised the draft for the National Solar Mission. It aims to to upset financial markets.
make India a global leader in solar energy and envisages
an installed solar generation capacity of 20 GW by 2020, Therefore, the capacity figures just give a trend, but do not


represent final numbers. It is worthwhile to mention that between the two figures, which cannot be avoided.
despite the fact that a significant number of players have
announced a slow down of their expansion, or cancelled If all these ambitious plans can be realised by 2012, China
their expansion plans for the time being, the number of new will have about 32% of the worldwide production capacity of
entrants into the field, notably large semiconductor or energy 54 GW, followed by Europe (20%), Taiwan (15%) and Japan
related companies, are overcompensating this and, at least (12%) (Fig. 4). However, it is expected that the capacity utili-
on paper, are increasing the expected production capacities. sation rate will further decrease from 56% in 2007 and 54%
in 2008 to less than 50% in 2012.
In addition, the assessment of all the capacity increases is
rather difficult, as it is affected by the following uncertain- In 2005 production of Thin-Film solar modules reached for
ties. The announcements of the increase in production ca- the first time more than 100 MW per annum. Since then
pacity in Europe, the US or China, often lack the information the Compound Annual Growth Rate (CAGR) of thin-film solar
about completion date compared to Japan. Because of the module production was even beyond that of the overall
Japanese mentality, where it is felt that a public announce- industry increasing the market share of thin-film products
ment reflects a commitment, the moral pressure to meet a from 6% in 2005 to 10% in 2007 and 12 – 14 % in 2008.
given time target is higher in Japan than elsewhere, where Thin-film shipments in 2008 increased by 129% compared
delays are more acceptable. Not all companies announce to 2007 and the utilisation rate of thin-film capacities is 60%
their capacity increases in advance. and somewhat higher than the overall utilisation rate of the
photovoltaic industry, with 54%.
In addition, it is of high importance to note that production
capacities are often announced, taking into account different More than 150 companies are involved in the thin-tilm solar
operation models, such as number of shifts, operating hours cell production process, ranging from R&D activities to major
per year, etc. manufacturing plants. The first 100 MW thin-film factories
became operational in 2007 and the announcements of
Announcements of the increase in production capacity do new production capacities accelerated again in 2008. If all
not always specify when the capacity will be fully ramped expansion plans are realised in time, thin-film production
up and operational and frequently refer to the installation of capacity could be 11.9 GW (vs 4.5 GW reported 2007 at the
the equipment only. It does not mean that the production line 22nd EUPVSEC in Milan) or 30% of the total 39 GW in 2010
is really fully operational. This means, especially with new and 20.4 GW in 2012 of a total of 54.3 GW (Fig. 5). The first
technologies, that there can be some time delay between thin-film factories with GW production capacity are already
installation of the production line and real sales of solar under construction for various thin-fFilm technologies.
cells. In addition, the production capacities are not equal to
sales and therefore, there is always a noticeable difference However, one should bear in mind that out of the ca. 150

Fig. 4: World-wide PV Production 2008 70.000
and planned production capacity increases
ROW
60.000
USA

50.000 Taiwan
China
40.000
[MW]

Europe
30.000 Japan

20.000

10.000

0
Production Planned Planned Planned Planned Planned
2008 Capacity Capacity 2009 Capacity 2010 Capacity 2012 Capacity 2015
2008


companies, which have announced their intention to in- with approximately 17 MW cumulative installed capacity at
crease their production capacity or start up production in the end of 2008. There are two main tracks – either high
the field of thin films, only one fourth have actually already concentration > 300 suns (HCPV) or low to medium concen-
produced thin film modules on a commercial scale. tration with a concentration factor of 2 to approx. 300. In order
to maximise the benefits of CPV, the technology requires
For 2010 about 12 GW of thin film production capacities are high Direct Normal Irradiation (DNI) and these areas have
announced, which is almost a doubling of the 2009 figures. a limited geographical range – the “Sun Belt” of the Earth.
Considering that the 2009 end-of-year capacity could eventu- The market share of CPV is still small, but an increasing
ally be ready for production, First Solar and Sharp together number of companies are focusing on CPV. In 2008 about
could contribute with about 2 GW, whereas the other existing 10 MW of CPV were produced and market predictions for
producers would add about the same capacity. For that reason, 2009 and 2010 are 30 MW and 100 MW respectively.
4 GW production in 2010 are considered as possible, if market
conditions allow. For the remaining 2 GW there is a high In the case of a continuing silicon feedstock expansion to
uncertainty as to whether or not it can be realised in the 120,000 metric tons available for the solar industry and a
time-frame given. material consumption decrease to 8 g/Wp, about 20 GW
of solar cells could theoretically then be produced annually
Despite the fact that only limited comparisons between the (15 GW silicon based and 6 GW thin films). This would be
different world regions are possible, the planned cell produc- twice as much as the current optimistic market predictions
tion capacities portray some very interesting developments. forecast. Another important factor is the actual utilisation
rate of the production capacities. For 2007 and 2008, the
First, the technology, as well as the company distribution, overall capacity utilisation rates of the solar cell industry with
varies significantly from region to region (Fig. 6). 48 compa- respect to shipments were given as 56% and 54% respective-
nies are located in Europe, 41 in China, 25 in the US, 17 in ly by Navigant Consulting [Min 2009]. This is different from
Taiwan, 9 in Japan and 16 elsewhere. The majority of 117 the utilisation rate with respect to production, as shipments
companies is silicon based. The reason is probably that were given with 3,061 MW and 5,492 MW by Navigant.
in the meantime there is a number of companies offering
complete production lines for amorphous and/or micro- Second, more than 15 companies are aiming at total pro-
morph silicon. 30 companies will use Cu(In,Ga)(Se,S)2 as duction capacity in the order of 1GW or more within the next
absorber material for their thin-film solar modules, whereas five to six years. The number of those aiming at 500 MW
11 companies will use CdTe and 8 companies go for dye and or more in the same time-frame is above 20.
other materials.
This leads to a third observation. If the large increase in pro-
Concentrating Photovoltaics (CPV) is an emerging market duction capacity is realised in China, the share on the world

Fig. 5: Actual and planned PV Production 70000
capacities of Thin-Film and Crystalline Silicon
based solar modules. Crystalline Silicon
60000
Thin Films
Production Capacity [MW]

50000

40000

30000

20000

10000

0
2006 2008 2009 2010 2012 2015


Fig. 6: Regional and technology
distribution of the thin-film 6000
production capacity increases.
CIS
5000 CdTe
Production Capacity [MW] silicon based
4000

3000

2000

1000

0
USA

USA

USA

USA

USA
Taiwan

Taiwan

Taiwan

Taiwan

Taiwan
ROW

ROW

ROW

ROW

ROW
Japan

Japan

Japan

Japan

Japan
China

China

China

China

China
Europe

Europe

Europe

Europe

Europe
2008 2009 2010 2012 2015

market would increase from 11.9% in 2005 to about 32% in lations of new Photovoltaic systems would have to increase
2012. This production capacity would be much more than from around 4.5 GW per annum in 2008 to 40 – 90 GW per
the 2 GW of cumulative installed solar systems in the People’s annum in 2020. This corresponds to a CAGR (Compound
Republic of China by 2011, as announced in July 2009. Annual Growth Rate) of 26% to 33% over the next 12 years.
Despite the positive market development signs in China, the
solar cell manufacturers in China will continue with a high This would be a dramatic change from the development of
export rate (98% in 2007) of their production to the growing the last years. Since the introduction of the German Feed-in
markets in Europe, the US and developing countries. Law in 1999, more than 80% of European PV systems were
installed in Germany. The Spanish PV market grew from
In response to the Intergovernmental Panel on Climate 14.5 MW in 2005, to about 2.7 GW in 2008. However,
Change's (IPCC) Fourth Assessment Report “Climate Change the prospects for 2009 are not as bright as the Spanish
2007”, the European Council endorsed during its Council Government introduced a cap of 500 MW on the yearly
Meeting in Brussels on 8-9 March 2007 a binding target installations, which is well below the 2008 installation figure.
of a 20% share of renewable energies in the overall EU Since 1999, European PV production has grown on average
energy consumption by 2020 and a 10% binding minimum by 50% per annum and reached almost 2 GW in 2008. The
target to be achieved by all Member States for the share of European market share rose during the same time from 20%
Biofuels in overall EU transport petrol and diesel consump- to 25%, whereas the Chinese from 0% to more than 30%.
tion [CEU 2007]. This target became law, when the Directive On the contrary, the US share decreased due to a weak home
2009/28/EC on the promotion of the use of energy from market. By 2005 the Japanese market share had increased
renewable energy sources was officially published on 5 June and stabilised at around 50 ± 3%, but decreased sharply to
2009 [EC 2009]. 37% in 2006, 24% in 2007 and 16% in 2008.

During the 23rd European Photovoltaic Solar Energy Conference The European PV industry has to continue its high growth
and Exhibition from 1 to 5 September 2008, Anton Milner, over the next years in order to maintain that level and to con-
Director of EPIA, presented the new vision of the European tribute to the new EPIA vision. This will, however, only be pos-
Photovoltaic Industry Association to produce 6 to 12% of sible if reliable and long-term political frame conditions – not
European electricity with Photovoltaic systems in 2020. This to be changed each year – are in place in Europe to enable
would correspond to 210 to 420 TWh of electricity or 175 to a return on investment for the PV industry and the final con-
350 GWp installed capacity of Photovoltaic electricity systems. sumer. One of the crucial issues is an agreement on an easy
To realise this new vision, around 165 GW to 340 GW of new and priority access of renewable electricity to the grid all over
capacity have to be installed between 2009 and 2020. Instal- Europe and preferably worldwide. The design of subsequent


monetary support mechanisms like feed-in tariffs, tax incen-
tives or direct investment subsidies, should then be designed
in a way that they enable the necessary capital investment
and take into account the cost and market developments.

Besides this political issue, a continuous improvement of
the solar cell and system technology is required. This leads
to the search for new developments with respect to material
use and consumption, device design, reliability and produc-
tion technologies, as well as new concepts to increase
overall efficiency.

Such developments are of particular interest in view of the
strategic importance of solar cell production as a key tech-
nology in the 21st century, as well as for the electrification of
developing countries and the fulfilment of Kyoto Targets.


3. Japan The long-term Japanese PV research and development
programmes, as well as the measures for market implemen-
tation which started in 1994, have ensured that Japan has
become a leading PV nation world-wide. The principles of
Japan’s Energy Policy are the 3Es:

■ Security of Japanese Energy Supply (Alternatives to oil)

■ Economic Efficiency (Market mechanisms)

■ Harmony with Environment (Cutting CO2 emissions on
line with the Kyoto Targets)

3.1 Policies to Introduce New Energies in
Japan

In earlier Status Reports, the main differences between
the Japanese and European reasons for the introduction of
renewable energies, as well as the history, were already de-
scribed [Jäg 2004]. The current basic energy policy is based
on market principles, but seeks to ensure a stable supply
and environmentally-friendly production and consumption of
energy at the same time [MET 2006]. The justification for
the promotion of New Energies is spelled out in the goals
supporting this policy:

■ Promoting energy conservation measures;

■ Developing and introducing diverse sources of energy;

■ Ensuring a stable supply of oil;

■ Basing the energy market on market principles.

The scarcity of natural conventional energy resources in
Japan, the current status of mid/long-term supply of oil and
the risks for a stable energy supply for Japan, as well as the
need to address global environmental problems, such as
reducing emissions of greenhouse gases like CO2, increase
the need to accelerate the advancement of implementation
of new energy. A description of the development of the Japa-
nese legislation and activities can be found in the 2008 PV
Status Report [Jäg 2008].

In November 2008, METI published the “Action Plan for Promo-
ting the Introduction of Solar Power Generation” [MET 2008].
This Action Plan was developed in order to support the Govern-
ment’s “Action Plan for Achieving a Low-carbon Society”
(approved by the Cabinet in July 2008) which set targets such as


■ Increase the amount of installations of solar power The main policy drivers in Japan can be summarised by the
generation systems 10-fold by 2020 and 40-fold following bullet points given by METI:
by 2030, and
■ Contribution to securing a stable energy supply as
■ Roughly halve the current price of the solar power an oil alternative energy;
generation system within three to five years.
■ Clean energy with a small burden on the environment;
The “Comprehensive Immediate Policy Package” (formulated
by the Government and the ruling parties in August 2008) ■ Contribution to new industry and job creation;
also cites the promotion of the installation of solar power
generation systems in homes, businesses and public facili- ■ Advantage of creating a decentralised energy system;
ties as a specific measure for the radical introduction of
new energy technologies in an effort to create a low-carbon ■ Contribution of load levelling for electric power
society. (effect reducing energy peaks).

A range of measures are proposed within three categories: The latest development is the enactment of the new law on
the Promotion of the Use of Nonfossil Energy Sources and
■ Supply and demand Effective Use of Fossil Energy Source Materials by Energy
The increase in the amount of installations, the reduc- Suppliers on 1 July 2009. With this law, the purchase of
tion in equipment prices, and the expansion of the "excess" electricity from PV systems is no longer based on a
market, should be pursued by implementing both voluntary agreement by the electric utility companies but it
“supply-side” measures (providing high-performance becomes a National Programme with cost burden sharing of
solar power generation systems at low cost) and all electricity customers.
“demand-side” measures (promoting the installation
of solar power generation systems in individual sectors ■ The outline of the new programme to purchase surplus
such as households, businesses and public facilities) electricity from PV systems is the following:
in such a way as to create synergies.
■ Obligation of utility companies to purchase PV power
■ Building an institutional infrastructure at a fixed price.
Along with supply-side and demand-side assistance
measures, it is essential that institutional infrastruc- ■ Eligible for the fixed price are PV systems on residential
ture, including regulatory instruments, be developed in and non-residential buildings which are grid connected
a comprehensive and unified manner. For this reason, and have contracts with an electricity utility company
the Government should improve institutional infrastruc- (reverse flow). PV systems designed for power genera-
ture in a way that facilitates smooth dissemination of tion and systems larger then 500 kWp are not eligible.
solar power generation.
An appropriate tool could be the operation of the ■ The fixed price in FY 2009 are:
Renewable Portfolio Standard Law (RPS Law) as a 48 ¥/kWh (0.37 €/kWh) for PV systems
response to figures in the Outlook for Long-Term Energy < 10 kW on residential houses
Supply and Demand. 39 ¥/kWh (0.30 €/kWh) for residential houses
with double power generation, e.g. PV + fuel cells, etc.
■ Consolidate the infrastructure for the solar energy-re- 24 ¥/kWh (0.18 €/kWh) for PV systems
lated industries, strengthen international competitive- on no-residential houses.
ness and support of international expansion
In addition to expanding the range of industries related ■ The rates are fixed for 10 years.
to solar power generation, there is an urgent need to
strengthen their industrial competitiveness by providing ■ The purchase price will be reviewed and decreased
support for technological development and securing by the Subcommittee on Surplus Power Purchase
of raw materials. The Government should assist solar Programme annually.
cell manufacturers and other solar power generation
industries so that they will be able to play a central role ■ All electricity users will equally bear the costs of the
in the future industrial structure of Japan. PV surcharge.


3.2 Implementation of Photovoltaics 1) Strategic promotion of technological developments
as a driving force for competitiveness:
The Japanese residential implementation programme for
Photovoltaics, which ended in October 2005, was the long- ■ Promotion of technological development to overcome
est running. It started with the “Monitoring Programme for high costs;
Residential PV systems” from 94 to 96, followed by the
“Programme for the Development of the Infrastructure for ■ Development of PV systems to facilitate grid-connection
the Introduction of Residential PV Systems”, which has been and creation of the environment for its implementation.
running since 1997. During this period, the average price
for 1 kWp in the residential sector fell from 2 million ¥/kWp 2) Accelerated demand creation:
in 1994 to 670,000 ¥/kWp in 2004. With the end of the
“Residential PV System Dissemination Programme” in October ■ Develop a range of support measures besides subsidies;
2005, the price data base of the New Energy Foundation
(NEF) was no longer continued. ■ Support to create new business models.

The Residential PV System Dissemination Programme has 3) Enhancement of competitiveness to establish a
been leading the expansion of Japan's PV market for 12 years. sustainable PV industry:
In 2006, 88.5%, or 254 MW of the new installations were
grid-connected residential systems, bringing the accumulated ■ Establishment of standards, codes and an accreditation
power of solar systems under the Japanese PV Residential system to contribute to the availability of human
Programme to 1,617 MW, out of 1,709 MW total installed resources, as well as securing performance, quality
PV capacity at the end of FY 2006 [Mat 2007]. However, in and safety;
FY 2007 the Japanese market declined to 210 MW and only
recovered slightly to 230 MW in 2008 [Ohi 2009, Epi 2009]. ■ Enhancement of the awareness for Photovoltaic systems;
At the end of 2008, total cumulative installed capacity was
2.15 GW, less then half of the original 4.8 GW goal for 2010. ■ Promotion of international co-operation.

In general, the end of the Residential PV System Dissemi- The key elements are industry-policy targeted and the goal
nation Programme in FY 2005 was considered the main is to strengthen the renewable energy industry in Japan.
reason for the decrease of new installations, but not so much This includes the whole value chain from raw material pro-
because of the financial incentive of ¥ 20,000 per kWp, but duction, cell, module and BOS component manufacturing
because this was perceived as lack of political support. In to the es-tablishment of business opportunities in overseas
order to stop the downward trend of the Japanese market markets. The strong focus on the establishment of interna-
and to stimulate the home market, METI announced at tional standards should help to transfer the new Japanese
the end of August 2008 that they wanted to reinstate an business models world-wide.
investment subsidy for residential Photovoltaic systems in
FY 2009 and that they have submitted a budget request. The number of Japanese Ministries working on support
measures to install PV systems has expanded from METI
These new measures to revitalise the Japanese market, to the Ministry of the Environment (MOE), the Ministry of
as well as METI's “Vision for New Energy Business” (June Land, Infrastructure and Transport (MLIT) and the Ministry
2004), the “New National Energy Strategy” (June 2006) of Agriculture, Forestry and Fisheries of Japan (MAFF).
and the “Action Plan for Promoting the Introduction of Solar
Power Generation” (November 2008) confirm the political In addition to the measures taken by the National Govern-
support for renewable energies. ment, over 300 local authorities have introduced measures
to promote the installation of PV systems. One of the largest
These activities are aimed to develop an independent and programmes was announced by the Tokyo Metropolitan
sustainable new energy business and various support meas- Government which plans to support the installation of 1 GW
ures for PV are explicitly mentioned. The key elements are: of PV systems in 40,000 households in FY2009 and 2010.
The Federation of Electric Power Companies of Japan (FEPC)
announced that they intend to install PV plants with a cumu-
lative installed capacity of 10 GW by 2020 [Ikk 2008].
7
Photovoltaic Power Generation Technology Research Association
8
Japan Photovoltaic Energy Association


Fig. 7: Japanese Roadmap
for PV R&D and market
implementation [Kur 2004]

Table 2: Key points of PV2030+ scenario for future growth of PV power generation

Target
(completion of development) 2010 or later 2020 (2017) 2030 (2025) 2050

Power generation cost Equivalent to house- Equivalent to Equivalent to Equivalent to
hold retail price commercial general power general power
retail price generation generation
(23 ¥/kWh) (14 ¥/kWh) (7 ¥/kWh) (7 ¥/kWh or below)

Commercial module
conversation 16% 20% 25% ultra high performance
(Lab.efficiency) (20%) (25%) (30%) modules with 40% added

Production for Japanese Market
[GW/annum] 0.5 - 1 2 to 3 6 to 12 25 - 35

Production for Export
[GW/annum] ca 1 ca 3 30 - 35 ca 300

Major applications single family houses, single/multi family single/multi family consumer use,
public facilities houses, public houses, public indutries, transport,
facilities, commercial facilities, consumer agriculture, etc.,
buildings use, charging Evs, etc. stand alone power source

Pv industry status report 2009

Pv industry status report 2009

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